Cost Sharing on Sponsored Projects

Overview:

This policy has been developed to ensure that cost sharing on sponsored projects is proposed, accounted for, and reported in a manner consistent with the requirements set forth in federal regulations (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Part 200, Code of Federal Regulations), requirements of Sponsoring agencies, The Arizona Board of Regents (ABOR), and Northern Arizona University (NAU).

It is the overall intention of NAU to minimize the inclusion of cost share arrangements on sponsored projects. NAU should only participate in cost sharing arrangements when it is mandated by the Sponsor or needed to accurately reflect the resources required to conduct the project.  All cost sharing arrangements require advance approval at NAU, and this approval must be secured before proposal submission.

Definition of Cost Sharing:

Cost sharing is the financial and non-financial support contributed by NAU to sponsored projects. Cost-sharing represents a portion of the total project costs (both direct and indirect) of a Sponsored agreement borne by the University, rather than by the sponsor. Cost sharing, also sometimes referred to as matching, is typically funded through a non-federal source.

It is the responsibility of the NAU unit(s) proposing the work to source internal resources to cover proposed cost share obligations. There may, however, be some instances where a special internal agreement may be formed where cost sharing may come from one or more sources, including other units, colleges/schools, and central administration at NAU. Cost sharing amounts can also be derived from non-NAU, or third parties if approved by the sponsor.

All proposed cost sharing resources require approval of the NAU unit providing the cost-share prior to proposal submission to the sponsor. Furthermore, cost sharing should be discussed and clarified by the Principal / Lead Investigator with the approving unit well in advance of proposal submission to the NAU Office of Sponsored Projects (OSP). As a result, cost share amounts should be clearly itemized with the appropriate NAU SpeedChart account numbers, where relevant, in the internal budget for OSP review and approval.

Read about the different types of cost-sharing 

Allowable Costs for Cost Sharing:

The obligation for cost sharing is associated with federal grants and cooperative agreements. In accordance with Uniform Guidance, resources used for cost sharing must be reasonable, allowable, allocable and meet the consistency requirements under federal cost principles. Sources for cost-sharing may include non-federal sources such as start-up packages, department/division related funds, indirect cost returns, or other NAU funds accessible by the PI. Funds from other grants and contracts typically may not be used as cost-share unless agreed to in advance by both sponsors.

In addition, the costs should be:

• Certified in the effort reporting system when salaries are involved (for mandatory and voluntary committed cost shared effort) and available from accounting records (for other cost sharing expense); and
• Necessary and directly related to project objectives.

The cost must not include any of the following:

• Costs included as cost sharing for any other project; or
• Costs paid from another federal project except as authorized by the federal agency.

View cost sharing expenditure information and examples 

Roles and Responsibilities

Dean’s Office, Academic Department and Research Unit

• Determine the cost sharing requirements of the project;
• Evaluate the workload implications of proposed cost sharing;
• Ensure the total effort for an individual does not exceed 100%;
• Identify, quantify, and record mandatory and voluntary committed cost sharing;
• Identify the cost sharing source for mandatory and voluntary committed cost sharing;
• Notify OSP of the cost sharing account for mandatory and voluntary committed cost sharing;
• Ensure that mandatory and cost sharing commitments are reflected in effort certifications for cost shared effort;
• Work with OSP to submit cost sharing reports (if required) that comply with Sponsor’s reporting requirements; and
• Ensure that mandatory and voluntary committed cost sharing commitments are met and properly budgeted and recorded.

Office of Sponsored Projects

• Review cost sharing requirements and commitments in the proposal and verifies these commitments are properly budgeted when awarded;
• Incorporate appropriate cost sharing conditions in subcontract agreement;
• Upon award, review cost sharing requirements and commitments for proper accounting treatment;
• Work with departmental/center administrators to determine appropriate reporting requirements; and
• Verify that cost sharing requirements have been met at close out.

Commonly Asked Questions